CNH to USD: RMB's steady ascent continues to weigh on pair amid technical weakness

airdrop_whisperer · 2026-01-15T22:07:07+00:00

The USD/CNH exchange rate is pressured at 7.0427 due to US dollar weakness and low yuan fixings by China's central bank. Chinese policymakers are intentionally guiding the RMB towards appreciation. Technical indicators suggest potential further depreciation if key support is breached, while the outlook depends on ongoing fixing adjustments and broader dollar trends.

airdrop_whisperer

2026-01-15 22:07:07

Abstract generation in progress

The USD/CNH exchange rate is trading under considerable pressure, with the pair hovering near its recent lows at 7.0427 as of the latest market data. This weakness stems from a confluence of factors: persistent broad-based US dollar weakness combined with the People’s Bank of China’s consistent pattern of setting low fixing rates for the yuan.

Policy-driven RMB appreciation pathway

A significant driver behind the yuan’s gradual strengthening is the deliberate fixing strategy employed by Chinese policymakers since April 2025. Last Friday’s USD/CNY fixing at 7.0638 marked the lowest level in 14 months, signaling an intentional approach to guide the RMB along an appreciation trajectory while preserving orderly market conditions. This fixing pattern has remained remarkably consistent, supporting the longer-term depreciation trend in USD/CNH.

Notably, both spot market prices and Bloomberg consensus forecasts for daily fixings have fallen below actual fixing levels for the past two weeks. This divergence suggests policymakers may be actively steering the yuan stronger while monitoring market reactions. Should authorities continue setting fixes at lower levels, further downside pressure on USD/CNH appears likely. Conversely, if policymakers opt to moderate the pace of depreciation, the pair could stabilize temporarily.

Technical outlook: approaching critical support

From a technical perspective, daily momentum indicators present a mildly bearish picture, with the Relative Strength Index (RSI) approaching oversold territory—a signal that sharp reversals could materialize. The immediate support level sits at 7.0380; a decisive break below this threshold could unleash further depreciation pressure, potentially pulling the pair toward 7.00. Resistance is positioned at 7.08, aligned with the 21-day moving average.

The path forward for USD/CNH hinges on two key variables: the trajectory of further Chinese fixing adjustments and whether US dollar weakness persists across broader markets. Any additional downward bias in the CNY fix or sustained USD softness would likely sustain downward momentum in the USD/CNH pair.

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